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EXHIBIT 17(c)(2)
ESCROW AGREEMENT
THIS AGREEMENT (the "Agreement") is made as of the 16th day of
August, 1999, by and among Xxxxx X. Xxxxxxxxxx, Xxxx X. Xxxxxxxxxx,
Xxxxx X. Xxxxxxxxxx, Xxxxx X. Xxxxxxx, Xxxxx X. Northern
(collectively, the Members"), and Pictsweet LLC, a Tennessee
limited liability company ("Pictsweet"), and Waring Xxx, PLC, a
Tennessee professional limited liability company ("Waring Xxx", and
"Escrow Agent")
WITNESSETH:
WHEREAS, the Members collectively own a total of 2,553,415 shares of
Class B common stock (the "Shares") of United Foods, Inc., a Delaware
corporation ("United Foods"), in the following respective amounts:
Xxxxx X. Xxxxxxxxxx 1,221,328
Xxxx X. Xxxxxxxxxx 9,474
Xxxxx X. Xxxxxxxxxx 440,871
Xxxxx X. Xxxxxxx 440,871
Xxxxx X. Northern 440,871
WHEREAS, the Members respectively own all of the membership
interests of Pictsweet;
WHEREAS, pursuant to a Merger Agreement dated May 14, 1999, by and
among Pictsweet, United Foods, and UF Acquisition Corp. (such agreement,
together with any modifications or supplements thereto, the "Merger Agreement"),
it is contemplated that upon satisfaction of all of the conditions therein, UF
Acquisition Corp. will merge with and into United Foods, with United Foods being
the survivor thereof (the "Merger");
WHEREAS, in connection with the Merger, the Members desire to transfer
and contribute their respective Shares to Pictsweet LLC ("Pictsweet") prior to
the Merger, as additional capital contributions ("Capital Contributions") for
their respective membership interests, pursuant to a certain Capital
Contribution Agreement dated as of August 16, 1999, by and among the Members and
Pictsweet (such agreement, together with any modifications or supplements
thereto, the "Contribution Agreement");
WHEREAS, pursuant to the terms of the Contribution Agreement, the
Members desire to place the Shares in escrow with Waring Xxx, as Escrow Agent,
to facilitate the contemplated transfer and contribution thereof to Pictsweet;
WHEREAS, the stock transfer agent for United Foods is First Union
National Bank (such agent, or any successor, the "Transfer Agent");
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WHEREAS, one or more of the Stock Certificates representing the Shares
may bear restrictive legends relating to securities laws (the "Transfer
Restrictions");
NOW, THEREFORE, in consideration of the foregoing and the mutual
promises contained herein, and for other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereby
agree as follows:
1. Appointment of Agent. The Members and Pictsweet hereby appoint
Waring Xxx as their escrow agent (the "Escrow Agent") upon the terms and
conditions contained herein, and Waring Xxx hereby accepts such appointment.
2. Delivery of Certificates into Escrow. Upon the execution hereof,
each Member shall deliver to the Escrow Agent (i) the stock certificates
representing his respective Shares, either duly endorsed thereon by such Member
to Pictsweet, or accompanied by separate stock powers acceptable to Pictsweet
duly endorsed to Pictsweet, in any case with such endorsements to be guaranteed
by a Medallion Guaranty or other signature guaranty acceptable to the Transfer
Agent (collectively, the "Stock Certificates"), and (ii) legal opinions to the
Transfer Agent (or any documents and approvals necessary to enable the Escrow
Agent to render legal opinions to the Transfer Agent), sufficient to permit the
transfer of the Shares of record in compliance with the Transfer Restrictions,
from a counsel and in form acceptable to United Foods (the "Legal Opinions").
Such delivery to the Escrow Agent shall not be deemed to transfer any ownership
of, or of any right, title or interest in, the Shares to Pictsweet.
3. Delivery of Certificates to Pictsweet. Upon receipt by the Escrow
Agent of either:
(i) a written instruction signed by Xxxxx X. Xxxxxxxxxx to deliver
the Stock Certificates and Legal Opinions to Pictsweet (or to cause the
Transfer Agent to transfer such Certificates of record to Pictsweet);
or
(ii) if no such instruction is received, a certificate signed by an
officer of United Foods (other than any Member) certifying to the
Escrow Agent that all conditions precedent to the occurrence of the
Merger (except for the filing of the Certificate of Merger with the
Secretary of State of Delaware) have been satisfied or waived,
then the Escrow Agent shall deliver the Stock Certificates and the Legal
Opinions to Pictsweet (or to the Transfer Agent for transfer of record to
Pictsweet) as the Capital Contributions, and shall insert (or cause to be
inserted) the date of transfer in the endorsements of the Stock Certificates (or
stock powers). The Escrow Agent shall have no duty to independently verify the
contents of the certificate described in subsection (ii) above, and shall be
entitled to rely upon it in all respects with respect to delivery of the Stock
Certificates.
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4. Adjustments for Additional Stock. Notwithstanding anything to the
contrary herein, if prior to the Effective Time of the Merger (as defined in the
Merger Agreement) any Member shall obtain additional shares of any common
capital stock of United Foods, then (i) such additional stock shall
automatically be deemed to constitute "Shares" within the meaning of this
Agreement, (ii) the stock certificates representing such additional stock shall
automatically be deemed to constitute "Stock Certificates" within the meaning of
this Agremeent, (iii) the Member owning such additional stock shall deliver the
stock certificates representing same to the Escrow Agent (endorsed, guaranteed,
and with Legal Opinions, in the same manner as required herein for all other
Stock Certificates), and (iv) the Escrow Agent shall hold and deliver the stock
certificates representing such additional stock to Pictsweet (or to the Transfer
Agent for transfer of record to Pictsweet) in the same manner and pursuant to
the same terms and conditions as the other Stock Certificates.
5. INSTRUCTIONS TO ESCROW AGENT DEEMED ABSOLUTE; NOT AFFECTED BY DEATH,
DISABILITY OR INCAPACITY OF MEMBER. THE INSTRUCTIONS OF THE PARTIES TO THE
ESCROW AGENT AS SET FORTH HEREIN SHALL BE DEEMED TO BE ABSOLUTE, UNCONDITIONAL,
IRREVOCABLE, AND COUPLED WITH AN INTEREST, AND SHALL NOT BE REVOKED, AFFECTED OR
IMPAIRED IN ANY MANNER WHATSOEVER BY THE SUBSEQUENT DEATH, DISABILITY, OR
INCAPACITY OF ANY MEMBER, and the duty of the Escrow Agent to deliver the Stock
Certificates, and take all other actions as described herein, shall not be
subject to attachment, enjoinment, offset, restraint, abatement or other legal
or equitable process by any party hereto by reason of any past, present, or
future disputes of any nature.
6. Return of Certificates Upon Certain Events. In the event that:
A. by 5:00 Central Time on December 31, 1999, the Escrow Agent has
received neither the written instruction from Xxxxx X. Xxxxxxxxxx nor the
officer's certificate of United Foods (as described in Section 3 hereof); or
B. all Members instruct the Escrow Agent in writing to return the
Stock Certificates to the Members;
then, in either event, the Escrow Agent shall promptly return to the Members
their respective Stock Certificates (and any other Escrow Property, as defined
herein).
7. Limited Responsibility. This Agreement expressly sets forth all the
duties of Escrow Agent with respect to any and all matters pertinent hereto, and
no implied duties or obligations shall be read into this Agreement against
Escrow Agent. Escrow Agent shall not be bound by the provisions of any agreement
among the other parties hereto except this Agreement.
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8. Ownership and Voting of Property in Escrow. Until the Stock
Certificates are delivered by the Escrow Agent to Pictsweet (or to the Transfer
Agent for transfer of record to Pictsweet) pursuant to the terms hereof, all
parties acknowledge and agree that the Members are and shall continue to remain
the owners of the Shares in all respects, and shall continue to be entitled to
exercise and receive all rights, privileges and properties with respect thereto,
including without limitation the right to vote the Shares and receive all
dividends and distributions with respect thereto. Accordingly, until the Escrow
Agent delivers the Stock Certificates to Pictsweet (or to the Transfer Agent for
transfer of record to Pictsweet) pursuant to the terms hereof, the Members shall
report all income, if any, that is earned or derived from the Shares as their
income for federal, state and local tax purposed, in such respective
proportions, and in the taxable year or years in which such income is properly
includible, and pay all taxes attributable thereto. The Members shall upon
request provide Escrow Agent with appropriate Internal Revenue Service Forms W-9
for tax identification number certification, or non-resident alien
certifications.
9. Termination of the Escrow. Upon the delivery by Escrow Agent of all
Stock Certificates and other Escrow Property pursuant to the terms hereof, or in
accordance with the joint written instructions of all other parties hereto, the
escrow created hereby shall terminate, and the Escrow Agent shall have no
further duties or obligations to the Members or Pictsweet of any nature
whatsoever. No termination of the escrow created hereby shall be deemed to
terminate any provisions of this Agreement relating to the construction,
interpretation, or enforcement of this Agreement, or any provisions herein
relating to the indemnity, exculpation, reimbursement, or other protections
afforded to the Escrow Agent.
10. Additional Rights and Duties of Escrow Agent. As used herein, the
term "Escrow Property" shall mean all Stock Certificates, and any other
property, documents, rights, or funds of any nature, now or hereafter delivered
to, or under the custody or control of, the Escrow Agent by reason of or
pursuant to the terms of this Agreement. The parties hereto specifically agree
as follows:
(a) Escrow Agent shall have no duty to invest any Escrow Property
held hereunder unless directed in writing by all parties to this Agreement.
(b) Escrow Agent shall not be liable for any acts or omissions in
connection with this Agreement, except for its own gross negligence or willful
misconduct. Except with respect to claims based upon such gross negligence or
willful misconduct that are successfully and finally adjudged against Escrow
Agent, all other parties hereto shall jointly and severally indemnify, defend
and hold Escrow Agent (and any successor Escrow Agent) harmless from and against
any and all losses, liabilities, claims, actions, damages and expenses
(including, without limitation, reasonable attorneys' fees and disbursements)
arising out of and in connection
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with this Agreement, whether asserted or initiated by parties hereto or any
third parties. This provision of this subparagraph shall survive any termination
of this Agreement.
(c) Escrow Agent shall be entitled to rely upon any order,
judgment, certification, certificate, demand, notice, instrument or other
writing delivered to it hereunder without being required to determine the
authenticity or the correctness of any fact or other matter stated therein or
the propriety or validity of any delivery or service thereof. Escrow Agent may
act in reliance upon any instrument or signature believed by it in good faith to
be genuine and may assume that the person purporting to give receipt or advice
or make any statement or execute any document in connection with the provisions
hereof has been duly authorized to do so. Escrow Agent may conclusively presume
that the representative of any party hereto which is an entity other than a
natural person has full power and authority to instruct Escrow Agent on behalf
of that party unless written notice to the contrary is delivered to Escrow
Agent.
(d) Escrow Agent may act pursuant to the advice of counsel with
respect to any matter relating to this Agreement and shall not be liable for any
action taken or omitted by it in good faith in accordance with such advice.
(e) Escrow Agent does not have an individual interest in the Escrow
Property deposited hereunder but is serving as a mere escrow holder only and
having only possession thereof. Any payments of income from the Escrow Property
shall be subject to withholding regulations then in force with respect to United
States taxes. This provisions shall survive notwithstanding any termination of
this Agreement or the resignation of Escrow Agent.
(f) Escrow Agent (and any successor Escrow Agent) may at any time
resign as such by delivering the Escrow Property to any successor Escrow Agent
jointly designated in writing by the other parties hereto, or to any court of
competent jurisdiction, whereupon Escrow Agent shall be discharged of and from
any and all further obligations arising in connection with this Agreement. The
resignation of Escrow Agent will take effect on the earlier of (i) the
appointment of a successor (including a court of competent jurisdiction) or (ii)
the day which is 30 days after the date of delivery of its written notice of
resignation to the other parties hereto. If at that time Escrow Agent has not
received a designation of a successor Escrow Agent, Escrow Agent's sole
responsibility after that time shall be to retain and safeguard the Escrow
Property until its receipt of a designation of successor Escrow Agent or a joint
written instruction from all of the other parties hereto (or their duly
appointed legal representatives) regarding the final disposition of the Escrow
Property or a final non-appealable order of a court of competent jurisdiction.
(g) In the event of any disagreement between or among the parties
hereto with respect to or in connection with the Escrow Property, Escrow Agent
shall be entitled, in its sole discretion,
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to (i) tender the Escrow Property into the custody of any court of competent
jurisdiction, together with such legal pleadings as Escrow Agent may deem
appropriate, and thereupon be discharged from all further duties and liabilities
hereunder, or (ii) retain the Escrow Property until Escrow Agent shall have
received (A) a final non-appealable order of a court of competent jurisdiction
directing delivery of the Escrow Property or (B) a written agreement executed by
all of the other parties hereto (or their duly appointed legal representatives)
directing delivery of the Escrow Property, in which event Escrow Agent shall
deliver the Escrow Property in accordance with such order or agreement and shall
have no further liability to the other parties hereto arising from or relating
to its prior retention of the Escrow Property. In Escrow Agent's sole
discretion, any court order must be accompanied by a legal opinion from counsel
for the presenting party satisfactory to Escrow Agent to the effect that the
order is final and non-appealable. Escrow Agent shall be entitled to act in
accordance with such court order and legal opinion without further question.
(h) The Members and Pictsweet jointly and severally promise to pay
Escrow Agent for all reasonable expenses, disbursements and advances incurred or
made by Escrow Agent in the performance of its duties or the exercise of its
rights hereunder (including, without limitation, reasonable professional fees to
third parties, expenses incurred in connection with investigating any claims or
other matters, fees, expenses and disbursements of its counsel, and all
reasonable and customary charges and expenses paid or incurred by Escrow Agent
in maintaining the Escrow Property). Any fees or expenses of Escrow Agent or its
counsel that are not paid as provided for herein may be paid from any Escrow
Property held by Escrow Agent hereunder.
(i) The Members expressly acknowledge to Escrow Agent that pursuant
to the Contribution Agreement, they have granted irrevocable durable powers of
attorney as to their Shares to Xxxxx X. Xxxxxxxxxx, coupled with an interest,
and agree that Escrow Agent is entitled to rely on such powers in all respects,
regardless of any disability, incapacity, or death of any Member.
(j) Prior to receipt of the written instruction or certificate
referred to in Section 3 hereof, the Escrow Agent is expressly authorized, for
the administrative convenience of all parties, to place the Stock Certificates
and Legal Opinions in the possession of the Transfer Agent in advance of any
transfer, to hold for the benefit of the Members, subject to and pending receipt
of instructions from the Escrow Agent to (i) transfer the Shares to Pictsweet or
(ii) return such instruments to the Escrow Agent. (Such advance placement of
possession with the Transfer Agent shall not be deemed to transfer any ownership
of, or of any right, title or interest in, the Shares to Pictsweet.)
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11. Miscellaneous Terms.
(a) Parties. This Agreement shall be binding upon, and run to the
benefit of, the parties hereto, and their respective heirs, executors,
administrators, successors and permitted assigns.
(b) Assignment. This Agreement may not be assigned without the
written consent of all other parties hereto. Any assignment in the absence of
such consent shall be null and void.
(c) Notices. All notices, requests, demands, claims and other
communications hereunder must be in writing and will be deemed to have been duly
given and received when (i) delivered to the party by hand, (ii) sent by
telecopier (with written confirmation of receipt) provided that a copy is
thereafter mailed by certified mail, return receipt requested, or (iii) when
delivered to the address listed below, if sent by a nationally recognized
overnight delivery service (such as FedEx), in each case to the appropriate
addresses and telecopier numbers set forth below (or to such other addresses and
telecopier numbers as a party may designate by notice to the other parties from
time to time):
If to the Members:
Xxxxx X. or Xxxx X. Xxxxxxxxxx
000 Xxxxx Xxxx Xxxxxx
Xxxxx, XX 00000
Xxxxx X. Xxxxxxx
00 Xxxxx Xxxxxx Xxxxxx
Xxxxx, XX 00000
Xxxxx X. Northern
000 Xxxxxx Xxxxx Xxxxxxxx
Xxxxx, XX 00000
Xxxxx X. Xxxxxxxxxx
00 Xxxxxx Xxxx
Xxxxx, XX 00000
If to Pictsweet::
Pictsweet LLC
Xxx Xxxxxxxxx Xxxxx
Xxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxxx X. Xxxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to Escrow Agent:
Xxx X. Xxxxxxx, Esq.
Waring Xxx, PLC
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00 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxx 00000-0000
Facsimile: (000) 000-0000
(d) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TENNESSEE, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
(e) Waivers. All waivers of rights or remedies under this Agreement
must be in writing and signed by the party granting such waiver. No waiver by
any party in any one instance or occurrence shall be deemed to constitute a
waiver for any other instance or occurrence.
(f) Severability. If any one or more of the provisions contained in
this Agreement shall be held invalid, illegal or unenforceable for any reason,
such invalidity, illegality or unenforceability shall not affect any other
provisions of this Agreement, which shall be construed as if such invalid,
illegal, or unenforceable provision had never been contained herein.
(g) Jurisdiction and Venue. The parties acknowledge that a
substantial portion of negotiations, anticipated performance and execution of
this Agreement occurred or shall occur in SHELBY COUNTY, TENNESSEE, and that,
therefore, without limiting the jurisdiction or venue of any other federal or
state courts, each of the parties irrevocably and unconditionally (i) agrees
that any suit, action or legal proceeding arising out of or relating to this
Agreement may be brought in the courts of record of the said County, or the
federal district court serving said County; (ii) consents to the jurisdiction of
each such court in any suit, action or proceeding; (iii) waives any objection
which it may have to the laying of venue of any such suit, action or proceeding
in any of such courts; and (iv) agrees that service of any court paper may be
effected on such party by mail, at the address provided in this Agreement, or in
such other manner as may be provided under applicable laws or court rules in
said state.
(h) Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original and all of which,
when taken together, will be deemed to constitute one and the same. This
Agreement shall become effective, as of the date set forth in the opening
paragraph hereof, when each party hereto has executed at least one counterpart
of this Agreement, and it shall not be necessary that any single counterpart
bear the signatures of all parties.
(i) Section Headings. The headings of sections in this Agreement
are provided for convenience only and shall not affect its construction or
interpretation hereof.
(j) Exclusive Agreement and Modification. This Agreement supersedes
all prior agreements among the parties with respect to its subject matter and
constitutes (together with the
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documents referred to in this Agreement) a complete and exclusive statement of
the terms of the agreement between the parties with respect to its subject
matter. This Agreement may not be amended except by a written agreement executed
by the parties.
(k) Facsimile Signatures. A facsimile signature of any party on
this Agreement shall be deemed to be as fully enforceable as an original
signature hereon.
(l) Further Assurances. From and after the date hereof, each party
hereto shall, at the request of any other party hereto, execute and deliver such
other documents and instruments, and perform such other acts and deeds, as may
be reasonably necessary from time to time to further confirm, carry out, or
comply with the terms hereof or the transactions contemplated hereby.
(m) Gender and Number. As used herein, words of any gender shall
include all other genders, and the singular shall include the plural, and vice
versa, as the context may reasonably require.
(n) WAIVER OF TRIAL BY JURY. THE PARTIES HEREBY WAIVE ALL RIGHTS TO
A TRIAL BY JURY IN ANY ACTION, CLAIM, SUIT OR PROCEEDING ARISING FROM OR
RELATING TO ANY PROVISION OF THIS AGREEMENT.
IN WITNESS WHEREOF, we have set our hands as of the day and year above
first written.
WARING XXX, PLC PICTSWEET LLC
By: /s/ Xxx X. Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxxxx
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Xxx X. Xxxxxxx, Member Xxxxx X. Xxxxxxxxxx, as
President (and in his
individual capacity)
/s/ Xxxxx X. Xxxxxxxxxx /s/ Xxxx X. Xxxxxxxxxx
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Xxxxx X. Xxxxxxxxxx Xxxx X. Xxxxxxxxxx
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxx X. Northern
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Xxxxx X. Xxxxxxx Xxxxx X. Northern
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IRREVOCABLE PROXY
In connection with the special meeting of the stockholders of United
Foods, Inc., a Delaware corporation (the "Company") to be held at Ten Pictsweet
Drive, Bells, Tennessee, at 9:00 a.m. local time, on September 23, 1999, and any
adjournments thereof (collectively, the "Meeting"), the undersigned do each
hereby IRREVOCABLY make, constitute and appoint XXXXX X. XXXXXXXXXX (if present
at the Meeting), and if Xxxxx X. Xxxxxxxxxx is not present at the Meeting, then
XXXX X. XXXXXXXXXX (if present at the Meeting), and if Xxxx X. Xxxxxxxxxx is not
present at the Meeting, then XXXXX X. XXXXXXX (if present at the Meeting), as
each of the undersigned's attorneys and proxies, with full power of substitution
in such attorneys and proxies, for and in the name, place and stead of each of
the undersigned, to vote any or all shares of Class A Common Stock and/or Class
B Common Stock of the Company owned or held of record by any of the undersigned
as of the record date, August 19, 1999, on any or all matters that may come
before the Meeting, including without limitation the matter of approving and
adopting the Agreement and Plan of Merger dated as of May 14, 1999, among the
Company, Pictsweet LLC, and UF Acquisition Corp. (the "Merger Agreement"), and
all Transactions as defined therein, with the foregoing powers to include
(without limitation, except such shares may not be voted against the adoption of
the Merger Agreement and Transactions) the right to vote all such shares to
adopt the Merger Agreement and to approve the Transactions by any method
whatsoever and/or to grant one or more proxies to vote any or all such shares by
means of the execution and delivery of one or more proxies in the manner
recommended in the Proxy Statement of the Company being prepared to be mailed to
stockholders of the Company prior to the Meeting. The Company is hereby
authorized to rely conclusively upon the signature of any of the forenamed
individuals on the stockholder attendance roster at the Meeting as evidence of
that individual's presence at the Meeting.
Each of the undersigned agrees that this proxy is coupled with an
interest and is IRREVOCABLE. This proxy revokes for each of the undersigned all
proxies heretofore given by any of the undersigned.
In Witness Whereof, each of the undersigned has executed this proxy on
the 16th day of August, 1999.
/s/ Xxxxx X. Xxxxxxxxxx /s/ Xxxxx X. Northern
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Xxxxx X. Xxxxxxxxxx Xxxxx X. Northern
/s/ Xxxxx X. Xxxxxxx /s/ Xxxx X. Xxxxxxxxxx
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Xxxxx X. Xxxxxxx Xxxx X. Xxxxxxxxxx
/s/ Xxxxx X. Xxxxxxxxxx
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Xxxxx X. Xxxxxxxxxx
